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Why do former belligerents institutionalize power-sharing arrangements after a civil war ends? What explains parties' desire to seek constitutional guarantees during peace negotiations rather than rely on electoral results alone to form governing coalitions? I suggest that elites create power-sharing institutions when the most significant threat to their political power comes from an outside group as opposed to from within their own group. That is, forward-looking and power-minded leaders of former belligerents push for the type of power-sharing at the negotiating table that affords them the greatest opportunity to influence national politics after the conflict has concluded in full. For elites facing competition from outside, this means securing power-sharing through institutional rules and guidelines in the settlement of the civil war to ensure that they are included in the governance of the state. By contrast, for elites fearing in-group rivals, complex governance institutions are at best unnecessary and, at worst, a significant concession to weaker opponents. I test my theory using a cross-national analysis of a dataset of all negotiated settlements since the end of the Second World War, coded for power-sharing variation. I complement the quantitative data with illustrative examples from cases of power-sharing negotiations that offer insight into the proposed theoretical mechanisms.